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Who's protecting the public interest now that TTC staff overseeing Spadina
subway construction may be replaced by a powerful engineering firm with a
history of cost overruns?
Published in April 8, 2015 edition of NOW Magazine
The overwhelmed TTC's transit expansion department is unable to oversee big
infrastructure projects like the Spadina subway extension without delays and
$150 million in cost overruns. That, the players at City Hall would have us
believe, is why TTC CEO Andy Byford fired chief capital officer Sameh Ghaly
and project manager Andy Bertolo in mid-March.
"It must change. Council must take back responsibility from the TTC, and new
major capital expansion must be delivered through public-private partnerships,"
city manager Joe Pennachetti told the Star. "A shocking lack of project
management," piped in TTC chair Josh Colle. They heap insult on injury. They
want us to give up on Toronto's in-house project managers and let global players
with their own histories of projects going over budget take over. Arguably,
Spadina's problems - and shakedown of the TTC bureaucracy - began under the Ford
administration when a 10 per cent cut was imposed on all city departments. The
TTC was hit hard: bus service cuts, fare increases, jobs lost and cleaning
services contracted out. Management staff was subject to attrition. TTC manager
Gary Webster was fired in 2012 for speaking his mind against the Ford plan to
extend the Sheppard subway. Ford took a hard line on the St. Clair streetcar
right-of-way during the election campaign, claiming it had gone over budget
because former mayor David Miller preferred a more expensive bid from Bombardier
to ensure a minimum level of Canadian content. Ford's message was clear: the
city's emphasis on Canadian content rules should no longer apply and future
contracts like the Spadina subway extension should go to the lowest bidder. But
choosing the cheaper option exposed the city to global contractors. This was a
crucial mistake, according to Clive Thurston, president of the Ontario General
Contractors Association. "Opening up local infrastructure to world markets has
negative consequences. When you choose the lowest bid, you get what you pay
for," he says. Several factors can prevent projects from coming in on time and
on budget - and the Spadina subway extension had more than its share. Among the
challenges: an extremely cold winter, an 18-month delay in funding approval from
higher levels of government, and problems with private utilities. All of these
contributed to delays beyond the TTC's control. But other factors, like the poor
performance of private contractors, were major parts of the problem. Spanish
construction consortium Fomento de Construcciones y Contratas (FCC) and Obrascón
Huarte Lain (OHL) got the contract to tunnel 4.5 kilometres and build the
Highway 407 station. OHL is also one of the companies in the Crosstown Transit
Partners consortium that's seeking a 30-year contract to design, build and
maintain the Eglinton Crosstown LRT. In 2014, London's Construction and
Technology Court backed the Gibraltar government's decision to cancel a contract
with OHL, which had failed to complete the Airport Access Tunnel Works project
on time and on budget. In 2013, just after austerity ended Spain's building
boom, both FCC and OHL were implicated in a scandal involving donations to
politicians in Spain's ruling People's Party. Under-performance by these two
contractors delayed the Spadina subway extension. According to an October 2012
TTC report, "The contractor struggled to progress work from the beginning of the
work and fell significantly behind schedule at the five major sites under its
control. In particular, start-up tunnelling and work on the Highway 407 station
fell far behind schedule." A subcontractor under FCC/OHL working at the York
University station had a poor safety record. In October 2011, a drill rig
collapsed, killing a 24-year-old construction worker. The site was shut down for
four months while the Ministry of Labour investigated. The contractor was fined
$400,000. Arup, a UK engineering multinational recently contracted to build a
controversial £42.6 billion ultra-high-speed rail line from London to
Birmingham, also ran into trouble on the Spadina extension. The TTC filed a $10
million breach of contract suit against Arup's Canadian subsidiary over alleged
errors, design flaws and failure to meet building and electrical codes during
construction of the Vaughan Metropolitan Centre subway station. So why didn't
TTC CEO Byford sue or cancel the contract with FCC and OHL? Why did he instead
recommend that the TTC hire engineering firm Bechtel to oversee the whole
operation - ignoring the fact that Bechtel's Boston "Big Dig" interstate highway
project was behind schedule and $12 billion over budget? (See below).
TTC spokesperson Brad Ross responds to Spadina subway extension cost overruns
and the transit authority's recommendation to turn over operations to
engineering firm Bechtel.
On whether there's an exit strategy if Bechtel can't meet its commitment to
complete the Spadina subway extension by 2017.
"We are committed to and accountable for a 2017 completion date."
On whether project managers fired by the TTC will be replaced.
"Andy Bertolo probably won't need to be replaced. Sameh Ghaly would need to be
replaced."
On why the TTC didn't sue and cancel the contract with the companies that
were underperforming instead of proposing construction be turned over to
Bechtel.
"We thought we would be better served by hiring an experienced engineering
firm."
Paid to advise the TTC on how to speed up the Spadina extension, Bechtel
proposed a "reset" and a change in project management to complete the work by
the end of 2017. Byford told the TTC Commission that for $150 million, bringing
in an outside engineering firm like Bechtel could "incentivize" the contractors.
To avoid further delay, however, the contract needed to be "sole-sourced,"
circumventing the normal process of publicly requesting bids. Since when do
private firms recommend changes to management personnel at the TTC? And who's
protecting the public interest when city staff are replaced by a powerful
engineering firm with a record of cost overruns and delays? Something smells
rotten at City Hall and TTC headquarters at 1900 Yonge.
Brenda Thompson is chair of the Keep It Public committee of transit advocacy
group TTCRiders.